Oil Price Falls amid Stronger Dollar
Around 49 percent of analysts said that prices of oil-based products will go on a downturn decline though 10th of July as the value of the US dollar increased.
Same group also said that higher US inventory on fuel products can have a significant affect the impact of the recession in the following weeks.
A recent data showed that the prices of crude oil and other petroleum-based products posted a record low in five weeks. Analysts said that a stronger dollar and higher US fuel inventory will help increase consumption amid economic recession.
The data also showed that major stock commodities, including the price of gold, decreased due to the stronger US currency. 49 percent of analysts who answered the survey, projected that the dollar value will continue to climb against the euro through July 10.
But Tokyo’s Mitsubishi Corp. Assistant General Manager for risk management Anthony Nunan said that the value of dollar remained weak despite the recent surge, saying that the data are only “prompt fundamentals as seen in the inventories.”
Since July 2, the US dollar has made some surges following the collapse of non-farm payroll data. Analysts said that the rising value of the dollar can significantly reduce the weight in commodities such as gold and oil.
Commodity strategist for Commonwealth Bank of Australia David Moore said that the stronger dollar is now hurting the oil companies, which on the other end can have a positive effect on people who recently lose their jobs.
Meanwhile, the low prices of fuel may not last long as Royal Dutch Shell Plc reported another attack in one of its plant in Nigeria. Since 2006, the attack has affected some 20 percent of the country’s exports. Nigeria is the fifth biggest supplier of US oil.
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